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What is a Climate Resilient Debt Clause (CRDC)?
Climate Resilient Debt Clause (CRDC) is a clause that allows the deferral of principal and interest payments on debt when an eligible natural disaster occurs in a borrowing country, subject to pre-agreed conditions. By temporarily deferring debt service payments, the borrowing country's government can secure financial resources for disaster response, recovery, and reconstruction efforts. Please refer to the CRDC Terms and Conditions for details of the CRDC framework and procedures.
Major Eligibility Conditions for CRDC
| At the time of the signing of L/A | ||
|---|---|---|
| 1 | Country | The Republic of Kiribati, the Independent State of Samoa, the Solomon Islands, Tuvalu, the Kingdom of Tonga, the Republic of Vanuatu, the Republic of Nauru, Niue, the Independent State of Papua New Guinea, the Republic of Palau, the Democratic Republic of Timor-Leste, the Republic of Fiji, the Republic of the Marshall Islands, the Federated States of Micronesia, the Republic of the Maldives, and the Kingdom of Bhutan (16 countries). |
| 2 | Eligible Project | New ODA loans. |
| 3 | Terms and Conditions | As set forth in Terms and Conditions of Japanese ODA Loans. |
| At the time of submitting Deferral Request | ||
| 1 | Eligible Disaster Events | The eligible disaster events are earthquakes and tropical cyclones that meet the following conditions. ・Earthquakes: Based on a reported moment magnitude of 7.0 or greater and a reported depth of 175 km or less. ・Tropical Cyclones: Based on reported maximum sustained wind speed of 178 km/hour (1-minutes average windspeed) or 119 km/hour (10-minute average windspeed), which is approximately equivalent to internationally used Category 3 or higher on a 5-level scale for classifying hurricane strength according to the speed of sustained winds. |
| 2 | Applicable Submission Period | A deferral request for CRDC may be submitted during the following period. Only one deferral request may be submitted per Loan Agreement (L/A). ・During the validity period of a national emergency declaration or within ninety (90) calendar days following the occurrence of an eligible disaster event, whichever period ends later. ・From the first principal repayment date to the date falling five years prior to the final maturity date. |
| 3 | Deferrable Payments | Principal and interest payments may be deferred for up to two years from the first repayment date after acceptance of deferral request. |
| 4 | Repayment Status | JICA shall not accept the request if the Borrower or any other borrower(s) in the Borrower's country is in arrears with principal repayment and/or interest payment of any Japanese ODA loans on the date of receipt of a deferral request by JICA. |
Procedures for CRDC
| Timing | Action | |
|---|---|---|
| 1 | L/A signing | Upon the borrower's request, a Loan Agreement (L/A) incorporating the CRDC is signed. |
| 2 | Occurrence of an Eligible Disaster Event | A borrower wishing to request a deferral submits a deferral request within the applicable submission period. If all requirements set forth in the CRDC Terms and Conditions are met, JICA revises the repayment schedule under the relevant L/A to restructure the deferred principal and interest payments while maintaining the loan’s average maturity unchanged before and after the deferral, and notifies the borrower accordingly |
| 3 | Repayment | The borrower repays principal and interest in accordance with the revised repayment schedule. |
(*) Please refer to the CRDC Terms and Conditions for details of the CRDC framework and procedures.